Fed Closer to Target Using Trimmed Inflation Measure

Bloomberg noted in a recent report that the Federal Reserve’s 2% inflation target looks a lot closer according to a price gauge favored by some policy makers.

Bloomberg said the trimmed mean measure, developed by the Dallas Fed, seeks to sort through the noise caused by the monthly ups and downs of prices to arrive at a more active reading of underlying inflation.

Bloomberg noted that St. Louis Fed President James Bullard has pointed to the gauge in recent days in making the case for the Fed’s first interest rate increase since 2006.